While national healthcare reform passed in March, implementing it will occur in stages. The legislation is detailed and has many provisions. It is important for you to understand what the legislation does and does not do.
The legislation does not create a national health insurance program. Rather, it fills the gaps in our current system, helping to provide insurance options for roughly 32 million of the 46 million Americans who have no insurance.
Some of the legislation will go into effect within six months of the March 2010 enactment, but a large portion will not be implemented until 2014 or later.
Changes in 2010
Effective in June, 90 days after the legislation’s enactment:
- Temporary national high-risk pools will offer insurance for individuals with pre-existing conditions who have been uninsured for at least six months. These risk pools will be operational until January 1, 2014, when options through the insurance exchanges become available.
Effective in September, six months after the legislation’s enactment:
- Pre-existing condition exclusions for children will be eliminated in all health plans.
- Young adults up to age 26 may be covered as dependents under all health plans.
- Lifetime limits will be prohibited for all individual and group plans.
- Prior to 2014, annual limits on coverage will be restricted as determined by the US Department of Health and Human Services.
- Rescissions—or health policy cancellations usually due to higher use of benefits and pre-existing conditions—will be prohibited, except in cases of fraud.
Changes in 2011
- Effective January 1, 2011, insurance companies will be required to pay rebates to enrollees if the company does not spend a minimum percentage of enrollees’ premium dollars on healthcare, as opposed to administrative expenses. For large group plans the minimum is 85%; for individual and small group plans the minimum is 80%.
Changes Beginning in 2014
- Pre-existing condition exclusions for adults will be eliminated for all health plans.
- Waiting periods for new policy coverage to become effective will be limited to 90 days for all plans.
- Annual limits on new individual and group plans and existing group plans will be prohibited.
- Medicaid eligibility will be extended to all uninsured low-income individuals younger than age 65, including adults without dependent children, who have incomes up to 133% of the federal poverty level (FPL). Current poverty guidelines are $14,404 for an individual and $29,326 for a family of four.
- Most citizens and legal residents will be required to have health insurance or pay a tax penalty.
- Employers with 50 or more employees that do not offer insurance may face a tax penalty if any worker receives federal subsidies to purchase health insurance.
- Individuals and small employers will be eligible to purchase insurance through state-based American Health Benefit Exchanges. Individuals with incomes between 133% and 400% of the FPL (or $14,404 to $43,320 for individuals and $29,326 to $88,200 for a family of four) will be eligible for premium and cost-sharing credits, also known as subsidies.